Finnish telecommunications company Nokia has revealed plans to cut up to 10,000 jobs worldwide in the next two years and wants to use the economy to reach its rivals in 5G technologies.
The company said it would reduce its global workforce to between 80,000 and 85,000 in the next 18 to 24 months, from 90,000 now. The exact number will depend on the evolution of the market. Nokia will invest the estimated annual cost savings of € 600 million (£ 515 million) in research and development, particularly in 5G, cloud and digital infrastructure.
Pekka Lundmark, the new chief executive of Nokia who took over in August, promised to reach 5G, the new generation of mobile networks, after Nokia lagged behind its main competitors, China’s Huawei and Sweden’s Ericsson. It missed the first rounds of 5G networks after focusing on integrating Alcatel-Lucent, the French wireless and smartphone company bought in 2015.
Lundmark said: “In the areas where we choose to compete, we will play to win. Therefore, we are improving product quality and cost competitiveness, and investing in the right skills and capabilities ”.
Nokia’s planned job losses include 96 in the UK. France will be spared this time, after 1,233 jobs were cut last year, which reduced the workforce of its French subsidiary Alcatel-Lucent by a third.
A Nokia spokesman said: “These plans are global and are likely to affect most countries. It is too early to comment in detail, as we have just informed the local works councils and we hope that the consultation processes will start soon, when applicable. “
About 300 jobs are expected to arrive in Finland, mainly at Nokia headquarters. The spokesman said the company will continue to recruit in the 5G area in the country, and that the changes will be positive.
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Last year, Nokia employed almost 40,000 people in Europe, 20,500 in the Asia-Pacific region, 13,700 in Greater China, 12,000 in North America and 3,700 in Latin America.
The global measures will result in one-time expenses of € 600 million to € 700 million, half of which will be earmarked this year. Even so, Nokia maintained its financial orientation for 2021.
Nokia now focuses on telecommunications network equipment. Once the world’s largest mobile phone maker, the company fell behind as it underestimated the popularity of touchscreen smartphones and sold its handset business to Microsoft in 2013, which later discarded them.
Nokia phones came back after a company created by former Nokia employees, called HMD Global, licensed the Nokia brand from Microsoft.